Gujarat High Court
All Gujarat Distrillers Association ... vs State Of Gujarat And Others on 17 January, 1997
Author: J.M.Panchal
Bench: J.M.Panchal
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION No 10836 of 1996
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ALL GUJARAT DISTRILLERS ASSOCIATION AND OTHERS
Versus
STATE OF GUJARAT AND OTHERS
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Appearance:
MR KS JHAVERI for Petitioners
NANAVATI ASSOCIATES for Respondent No. 1
SERVED BY DS for Respondent No. 2
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CORAM : MR.JUSTICE J.M.PANCHAL
Date of Order: 17/01/97
ORAL ORDER
Rule.
Heard the learned Counsel for the parties with regard to interim relief.
Petitioner no.1 is All Gujarat Distillers Association and petitioners no.2 to 6 are members of petitioner no.1-Association. Petitioners no.2 to 6 are manufacturers of industrial alcohol in the State of Gujarat. Petitioners no.2 to 6 need molasses for the purpose of their products i.e. industrial alcohol. Respondent no.7 is the Association of sugar industries which supply molasses to the petitioners no.2 to 6. In exercise of powers conferred by section 18G of the Industries (Development and Regulations) Act,1951, the Central Government had made Molasses Control Order, 1961 to regulate sale, removal, grading, price, maintenance of accounts of production etc.of molasses. By order dated June 10,1993, the Central Government has issued an order in exercise of powers conferred on it by section 18G of the Industries (Development and Regulations) Act,1951 rescinding Molasses Control Order,1961 as well as Ethyl Alcohol (Price Control) Order,1971. From the contents of letter dated June 14,1993 addressed by the Central Government to all the Chief Secretaries of States, it is evident that Molasses Control Order,1961 and Ethyl Alcohol (Price Control) Order,1971 had outlived their utility and had obstructed free movement of molasses and alcohol causing unnecessary delays which had adverse effect on the down stream industries. In the line with the economic liberalisation programme of the Government, the Central Government by said letter asked State Governments to formulate scheme to ensure that capacity for manufacture of molasses based potable alchol, was not expanded, illicit distillation was kept under control and there was no undue diversion of molasses to the potable alcohol sector. The full text of said letter is reproduced by the petitioners in the petition. The State Government took policy decision to allow free export of molasses which was communicated to Managing Director of respondentno.7 by letter dated May 22,1996. The decision of the State Government is produced by respondent no.7 along with affidavit-in-reply at Annexure-III. It is the case of the petitioners that because of policy of the State Government, if members of respondent no.7-Association are permitted to export molasses from outside State, it would result into closure of their units because of, (1) non-availability of molasses and (2) prohibitive and exhorbitant price at which molasses is offered to the petitioners. The petitioners have claimed that other States despite policy of decontrol of molasses, have not permitted export of molasses outside their respective States. The petitioners have asserted that the State Government had promised supply of necessary quantity of molasses to the petitioners and, therefore, policy of the State Government allowing free export of molasses as indicated in communication dated May 22,1996 is illegal and ultravires. Under the circumstances, the petitioners have filed the petition and prayed to issue a writ of mandamus to restrain the State Government from permitting export of molasses outside State of Gujarat or allowing respondent no.7 or its members from exporting molasses outside the State of Gujarat. The petitioners have also prayed to direct the respondents to equitably distribute the molasses produced in the State to the industries being run by petitioners no.2 to 6 at fair price for development of industries engaged in production of industrial alcohol. By way of ad-interim relief, the petitioners have prayed to issue an injunction restraining the respondents including members of respondent no.7 from exporting molasses outside State of Gujarat.
The petition was placed for admission hearing before Court on January 2,1997. After hearing the learned Counsel for the petitioners, notice was issued making it returnable on January 9,1997. On notice being served, respondent no.7 has filed affidavit-in-reply. It is pointed out that industries manufacturing alcohol are not in a position to lift the existing stock as a result of which stocks of molasses have piled up. It is emphasised that if interim relief as prayed for is granted,members of respondent no.7- Sangh would not be entitled to export molasses outside State and will have no option, but to sell the molasses at throw away prices to members of petitioner no.1-Association and others. A categorical statement on oath is made in the reply affidavit that respondent no.7 has reserved total quantum of 3 lac MTs of molasses for consumption of molasses within the State of Gujarat and only the balance remaining thereafter is sought to be exported. It is stressed that the petition seeks to dictate policies to the State Government and should be rejected in limine. The petitioners have filed affidavit-in-rejoinder to which respondent no.7 has filed sur-rejoinder. The petitioners have also filed affidavit-in-sur-sur-rejoinder.
There is no manner of doubt that as on today there is no provision which regulates sale, removal, grading, price etc. relating to molasses. Having regard to economic liberalisation programme of Central Government as indicated in letter dated June 14,1993 it cannot be said that policy of the State Government to permit export of molasses outside State is prima-facie arbitrary or unreasonable. It is well settled that policy decision of Government cannot be interfered with under Article 226 of the Constitution unless is arbitrary or unreasonable. The State Government had declared its policy to permit export of molasses on May 5,1996; whereas respondent no.7 entered into contract with M/s.Midex Overseas Ltd. for supply of molasses on December 10,1996 i.e. after about 7 months of declaration of policy by the State. Having regard to the policy declared by the State Government, respondent no.7 has bonafide entered into contract with M/s. Midex Overseas Ltd., and if interim relief as prayed for is granted, respondent no.7 would not be able to honour contractual obligations. As mentioned in the reply affidavit, adequate quanity of molasses is reserved for sale within the State of Gujarat. Therefore, prima-facie,apprehension of the petitioners that their Units manufacturing industrial alcohol will be compelled to close down their commercial activities, does not appear to be reasonable. The prayer to direct the State Government to exercise powers under section 6 of the Bombay Molasses (Control) Act,1956 cannot be granted at this stage. Granting of interim relief would amount to allowing the petition at this stage without adjudicating the claims raised in the petition. Such a relief is not called for in the facts of the case.Hence, interim relief is refused.
Mr. M.R.Anand, learned Government Pleader on instructions states that the petitioners have made representation pursuant to the order dated May 12,1994 passed by the High Court in Special Civil Application no. 6896/94 and the said representation shall be considered by the State Government without being influenced in any manner by this order. It is clarified that the State Government shall not be influenced by this order and shall take decision on the representation made by the petitioners, according to law and on its on merits, as early as possible and without any avoidable delay.
January 17,1997( J.M.Panchal,J.)